WeWork: Application of Innovation Theories and Future Development

This report analyzes WeWork, a commercial real estate firm specializing in shared workspaces, through the lens of innovation theories. It begins by defining and explaining key concepts like disruptive innovation and the diffusion of innovation, outlining their principles and processes. The report then applies these theories to WeWork's historical development, examining its business model and the evolution of its products and services. It highlights WeWork's 'space as a service' model and its impact on the real estate market. Finally, the report provides recommendations for WeWork's future development pathways, considering potential strategies for product and service innovation. The analysis includes an evaluation of the theories' benefits and limitations, offering a comprehensive understanding of innovation within the context of WeWork's business operations and market position.

Managing Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Innovation theories.................................................................................................................3
Definitions, Principals and Processes of the theory...........................................................4
Application of innovation theory to explain historical development of product and/or services
of organisation........................................................................................................................6
Background of WeWork......................................................................................................6
Recommendations for possible future development pathways of products or services for
selected.................................................................................................................................10
organisation..........................................................................................................................10
Future Development........................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Innovation is referred as the process of translating idea into product or service that
generates some value to customers. In context of business, when an idea is implement by an
organisation to satisfy the expectations and need of consumers, then it often results in innovation.
In other words, it is the generation, development and execution of new product, service or
process with the intent of improving competitiveness, effectiveness and efficiency. An
innovation that develops new value network and market and finally disrupts the existing one,
displacing already developed market leading products, companies and alliances is termed as
disruptive innovation. Diffusion of innovation is the another theory that try to explicate why,
how and at what rate new technology and idea spreads. In this report, the selected organisation is
WeWork which is a commercial real estate firm of America that administers shared workspaces
for tech start ups. This report covers innovation theories, their principles and processes along
with their benefits and limitations. Apart from this, it includes application of theory to explicate
historical development of product or service of company. At last, recommendations for possible
development pathways for future in context of company are included in report.
MAIN BODY
Innovation theories
Innovation refers to the procedure of converting new idea or concept into product or
service that create some sort of value to user. In order to succeed in today's competitive market,
it is very necessary for organisations to bring innovation in their products and services on
constant basis. It helps a company in effectively responding to disrupters of industry and
enhancing market share. Apart from this, innovation also assist in responding to extrinsic
challenges quickly by developing technological and human resources to do things distinctly. In
present scenario, innovation theories allow the organisation to sustain within the market as
proper competition can be easily given to rivalry firms (Kim, and Mauborgne, 2005). Innovation
simply allows the business organisation to enhance their productivity which can allow the
customers to enjoy various rights and benefits due to which goals can be accomplished easily.
Below, there is the detail, description about innovation theories which is beneficial for company
at the time of accomplishing the goals.

Definitions, Principals and Processes of the theory
Diffusion of innovation: It is explained as one of the oldest innovation theory related to
social science theories. This theory emphasis about how, why and even at what rate any of the
new ideas can be introduced by the organisation for the purpose of accomplishing the goals.
With the help of this types of theory, organisation can easily introduce any of the new concept
and idea which will automatically allow them to uplift the standard of a company. In this
respective innovation theory there are different areas which is needed to be considered so that
work can be performed in a specific manner (Jaw, Chen and Chen, 2012).
The simply concept which is carried by diffusion of innovation is the that concept should
be different from other people where new idea, behaviour or new product should be introduced.
This process required continuous research through which better improvement can be brought
within the ideas and thoughts so that innovation can be done. Here, while promoting any of the
innovation, it is essential to use different strategies by the innovators and there are different types
of people who invent the product and those people are:
 Innovators – While talking about this respective area people are the one who tries to
invent something new and becomes the first candidate who has successfully conducted
something new. These are mainly done with new ideas and concept but risk is always
included for them so they must take any of the steps by knowing its positive and negative
side.
 Early Adopters – It is said that this are the people who represent themselves as a opinion
leaders. Here, people enjoys the role which is provided to them and creates the chance for
themselves. This are those people who have certain idea about the changes required
within the society (Tidd and Bessant, 2018).
 Majority: This types of innovation is done only in that respective circumstance where
people think to introduce about the idea and concept so that goals can be accomplished
easily. This types of innovation are done only after approval of majority of the members.
Disruptive Innovation: Disruptive innovation is the one in which new technology is
used by the businesses in their existing products and services, in the existing market. It is the
type of innovation with the help of which new market can be created and new values are
provided to the customers. With the help of this a value network id designed with the help of
various new technology and the improved processes. For this the existing market is disrupted due

to which the existing products and services are affected the most. Such innovations are generally
launched either by the start-ups or by the outside companies. The companies that are market
leaders do not consider such innovation as the market conditions for them does not allow them to
introduce to such innovation. Introduction of innovation can lead to huge cost to the company as
for this they need to adopt latest technology which increase requirement of the funds and it can
have fewer advantages. Various disruptive techniques are generally used by the organisation that
includes the use of mobile internet, automation of the technological tasks of the company,
internet of the things, clouding technology and many more. With the help of this various
technologies are used on all the processes of the organisation. This will make them understand
the changes that are taking place with their existing competence of the employees. For this the
employees can be better understood as per their level of competence as on the basis of this
various training and development sessions.
Evaluation of the theory (Benefits and limitations)
Diffusion of innovation: It is one of the effective theory which can easily allow to attract
the people. This types of theory can be simply helpful for introducing the new idea and concept
through which goals and target can be accomplished easily. There have been number of benefits
and limitation of this respective theories and those mentioned below:
Benefits
 It is among one of those theory which simply allows to understand about the trending
concepts and the requirement of the market and according to that innovation can be done
easily.
 Second, most important benefit which can be obtained with the help of this respective
theory is that company can easily determine about the positive and negative side of the
innovation (Santoro and et. al., 2018). It will simply give clear vision, whether goals will
be accomplished or not.
Limitations
 It has been found that there are number of organisation which already work in this
respective ground under early adopter which reduces the chances of obtaining the goals.
 Cultural limitation can be found because there are number of people who do not like to
adopt changes which can be one of the reason due to which innovator might has to suffer
in number of situation.

 Much of the evidence for this theory, including the adopter categories, did not originate
in public health and it was not developed to explicitly apply to adoption of new
behaviours or health innovations.
 It does not foster a participatory approach to adoption of a public health program.
Disruptive innovation theory: The disruption so identified can come from different
sources which can be low-end disruption and new-market disruption. The low-end disruption
focuses upon bring the business at the bottom level for serving the customers. Such market is
generally having lower profits etc. While new-market disruption is the one in which the focus if
upon the competition in the lower market segment of the market that the company serves to. As
per this theory it is analysed that the disruption innovation is not a product or service that is
launched by a company rather it is a process with the help of which the organisations aims to
improves their process so that the business model can be improved. This will enable them in
dealing with the threats that may arise due to changing needs of the customers.
Advantages: Such innovation offers various benefits to the organisation as with this they
can develop new capabilities within the business in a short period. By introducing technology in
the organisation can reduce their overall cost of the business. This contributes to the enhanced
profitability of the company. The disruption innovation enables the new people to easily enter
into the market with different technology with which they can satisfy their customers.
Disadvantages: The disruptive innovation has various disadvantages for the businesses as they
have to discontinue the existing production process due to which the cost of the business
increases. Also it leads to wastage of the resources of the company. The change may not be
accepted by the customers and the even by the employees too. It can lead to increase in the
demand of the changing the promotional techniques that has been used presently. Disruptive
innovation makes it difficult to quantify the level of commercialisation and make the business so
competitive.
Application of innovation theory to explain historical development of product and/or services of
organisation
Background of WeWork
WeWork is one of the famous multinational organisation that deals in different part of the
world. It deals in the sector of real estate. The company was incorporated in the year 2010 by

Adam Neumann, Miguel McKelvey, Rebekah Neumann. The headquarter of the organisation is
located in the New York City US (De Massis and et. al, 2018). In present scenario, there are
around fifteen thousand employees who is working with the company for the purpose of
accomplishing the goals of an organisation. Also, almost six hundred thousand members are
connected with the organisation in current situation. When having the discussion about business
model of the company, they believe on renting model where space can be provided to offices,
start-ups and many more at a reasonable price. The main reason behind the use of renting model
is simply as just to attract more number of customers towards the organisation (Careers at
WeWork, 2019).
business model canvas
Business Canvas Model of WeWork
Figure 1: Why WeWork Business Model is Successful. 2019

(Why WeWork Business Model is Successful. 2019)
In present scenario, the business canvas model of WeWork clearly identify that company
is able to perform well within the market. Even they are among one of those organisation where
they like to deliver the product and services sat a reasonable among of price. It is necessary
because it will allow them to attract more number of customers towards the company and even
percentage of competition can be reduced. There canvas model gives the opportunity to start-up
and new entrepreneurs to perform business activity at a reasonable amount of price.
Historical Development
The business of WeWork was started in the year 2010 were Neumann and Mckelvey sold
their business for the purpose of starting the business activity. The location of the business was
SoHo district which is located in the city called New York.
There was different phase which company faced for the purpose of accomplishing the
goals within the specific time period. The concept of company was very different as compared to
other business organisation which made it possible for WeWork to achieve the target. The main
concept which they had used is ‘space as a service’ model. This simply allows the company to
perform better in any of the situation and started to give tough competition to rivalries. From the
year 2008-2015 the company got the tag of fastest growing lessee of new office space within the
area of New York. WeWork also started number of new ventures like Reddit, Turf and many
more which allow them to settle their business properly (Kianto, Sáenz and Aramburu, 2017). By
the end of 2015, company had around 51 co-working location within U.S., Europe and Israel.
Not only this but in the year 2016, WeWork has selected the fortune magazine for one of
the three unicorn to bet against. The overall valuation was around $10 billion. The fourth new
locations were decided in Cambridge were 550 new desks was decided. In year 2017, the
valuation of the company was around $20 billion. There were number of decisions was taken
which allowed the organisation to start number of program such as online services were started.
The company expanded its business to Southeast Asia. This were some of the main factor which
allowed the organisation to become one of recognised company.
This were some of the historical development of the company which allowed them to
make stable their business. Also, company was able to provide number of services within the

different part of world. The main reason of company’s benefit is its services which is being
delivered at a reasonable price. It is one of the idea which was completely new and different
from other organisation in current scenario (Natalicchio and et. al, 2017). The innovation
process which was selected by WeWork was Diffusion of innovation. Here, they were one of the
organisation who brought the concept that how they can be different than other business
organisation. It was found that company sold its rental services to new start-ups which gives
them the strength to perform as per the requirement. We work was one of those inventor who
was new in the market and it was one of those idea which was brought much earlier than aspect.
Recommendations for possible future development pathways of products or services for selected
organisation
Future Development
Company is performing well within the market since last many year and they are able to
attract the customers which they are willing. It will necessary for the company to bring some of
the new ideas and plans so that they can succeed to their plans and policies. It will also allow
them to accomplish their goals and targets with the specific time period.
WeWork has been involved within the business since long time period but it has been found
that they are not too good at online services where they can easily work to enhance their
performance in the market (Roberts and et. al., 2016). The main motive to work more with the
help of online service is simply as it will give them the idea that how they are required attract
customers. While working on online services they should focus towards those areas where they
are not working currently as it will have the positive impact for company.
Number of other services can be included in their real estate services as they can focus
towards inclusion of some of the services which are related with information technology. Those
technologies should be related with the alarm system where if any of the emergency situation
occurs then alarm will get started. The second most important thing which they can include is
that they will have the choice to include some of the infrastructural services where people will
get the opportunity to share the vehicles of different company at cheap rate. Also, it will the time
for employees which will directly allow them to utilise the same time in different field where
productivity will increase automatically.

The another area where company has the option to invest their capital is cafeteria where
huge amount of money can be earned. Although, they have been providing the service of co-
working where they are giving the services at a cheap price but still it has been found that
company is not able to start any of the cafeteria services which can be effective. This services
will directly allow the employees to because they will be able to buy the food products which
will give the opportunity to have fresh food during the lunch time.
There are number of nation where it has been found that performing the business activity is
not possible so in that respective option company has the option to work as joint venture. This
types of business will allow the company to start its new desk at a reasonable price and even new
services can be delivered at a cheap price. Other than this, the management has the option to
provide to provide the knowledge to public who is not aware about the services which are being
offered by the organisation (de Vasconcelos Gomes and et. al., 2018). It will directly allow them
to attract more number of entrepreneurs who like to reduce their expenses for the purpose of
earning more profit.

CONCLUSION
As per the above mentioned report, it has been concluded that there are different types of
innovation theory which is being used by the organisation for the purpose of introducing
something new with the market. the innovation theory will allow them to uplift the performance
and even goals can be accomplished easily. Theories are helpful because it will give them the
strength and allow the organisation to give better competition within the market. Whenever any
of the new concepts are introduced within the market there are high possibilities that more
number of customers will try to make use of it for the purpose of determine its pros and cons.
Not only it, as it is essential for any of the company to look forward in the market and must focus
towards multiple field and future development which will give them the idea to accomplish the
targets.

REFERENCES
Books & Journals
Kim C., and Mauborgne R., 2005. Blue Ocean Strategy. How to create uncontested Market
Space and Make the Competition Irrelevant. Page 16. Published Harvest, Boston.
Jaw, Y. L., Chen, C. L. and Chen, S., 2012. Managing innovation in the creative industries–A
cultural production innovation perspective. Innovation. 14(2). pp.256-275.
Tidd, J. and Bessant, J. R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Santoro, G. and et. al., 2018. The Internet of Things: Building a knowledge management system
for open innovation and knowledge management capacity. Technological Forecasting
and Social Change, 136, pp.347-354.
De Massis, A. and et. al, 2018. Innovation with Limited Resources: Management Lessons from
the G erman M ittelstand. Journal of Product Innovation Management. 35(1). pp.125-
146.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research. 81. pp.11-
20.
Natalicchio, A. and et. al, 2017. Managing knowledge assets for open innovation: a systematic
literature review. Journal of Knowledge Management.
Roberts, J. P. and et. al., 2016, March. A design thinking framework for healthcare management
and innovation. In Healthcare (Vol. 4, No. 1, pp. 11-14). Elsevier.
de Vasconcelos Gomes, L. A. and et. al., 2018. Unpacking the innovation ecosystem construct:
Evolution, gaps and trends. Technological Forecasting and Social Change. 136. pp.30-
48.
Online
Diffusion of Innovation Theory. 2018. [Online]. Available Through:
<http://sphweb.bumc.bu.edu/otlt/MPH-
Modules/SB/BehavioralChangeTheories/BehavioralChangeTheories4.html>
Careers at WeWork. 2019. [Online]. Available Through:
<https://www.cleverism.com/company/wework/>
Why WeWork Business Model is Successful. 2019. [Online]. Available Through:
<https://vizologi.com/business-strategy-canvas/wework-business-model-canvas/>